So many healthcare providers allow their reimbursement contracts to veer out of control. Before they realize what’s happened, 7+ years have passed without any attempt to renegotiate their fees. Their rent, electric bill, staffing and supply costs and other overheads continue to rise each year. They delay asking for help until the problem is so bad that they lose money on every patient encounter. Most don’t realize that if they wait too long, the payer can refuse to bring them up to average market rates for their community or region because they unreasonably delayed their request for a rate escalation for several years. Allowing the same reimbursement rates to continue year after year after year can lead the payer to “assume” (perhaps incorrectly) that they don’t need to budget to pay the provider more. Those assumptions are then transmitted to actuaries and underwriters who assess financial risk to the health plan for the cost of claims for the year. The actuarial workups are then tendered to the State Department of Insurance for review and validation. In some states, rate filings must be tendered to regulators 24 months in advance. So if the provider allows too much time to pass since the last increase, the money to pay a higher rate may not be in the budget. Some consultants will tell you that you must re-negotiate all your contracts at once. That’s crazy talk! Who has time or budget to tackle what may be as many as 200-400 contracts in your portfolio all at the same time? We know from experience that only a rank amateur trolling for billable hours would dare to suggest such a strategy. Set Priorities A spreadsheet like this one I’ve described here will help you to prioritize which contracts require immediate attention. From there, you can sort out where to assign effort for the quickest gain. BUT... Without knowing your costs to deliver each service, you cannot really analyze profitability. If you don’t have the wherewithal to analyze your costs at this time, do the next best thing, at least keep you contracts in lockstep with current fee reimbursements in the region.
Your professional and business brand can make a difference in your reimbursement rates If you build a recognized and highly reputable professional or business brand, you can boost rates to as much as 14% above local norms. Think about the leading healthcare brands in America for a moment. Do you think they contract at the average rate where they are located? Or do they demand (and get) higher rates? If you need help to create your professional brand, define brand value, messaging points and boost your relevance and impact with third-party payers, we can help. But first, let’s tackle the initial assessment of where you stand today with your most crucial contracts. These are usually the top 5-7 contracts for which your day to day financial survival is dependent. Create a Spreadsheet with the following information: Col A: CPT Codes of your contracted services Col B: Medicare Rates Col C - I: Top 7 contracts ( by revenue impact) and their rates Col J: Date of last increase or fee negotiation Col K: Pay gap from targeted reimbursement rate you'd be willing to accept, if any Col L: Frequency with which you billed that code in the past year (Materiality test) Col M: Assigned to whom in your office to contact the payer to initiate discussions for remedy, if indicated. Col N: Payer representative name and contact details Col O: Date of contact Col P: Response, if any and next steps. If you feel you don’t have time, you don’t have all the numbers, or no one on your staff is competent to manage the process, let’s chat. I can train your staff, or we can take this task off your hands and do it for you. (800) 727.4160.